Personal Data, Privacy & Smartphones: The Cautious Consumer A consumer study conducted by AppsFlyer and MMA Global Background: In 2021, Apple will introduce new privacy features for iOS 14, that include consumer opt-in for permission for marketers to track online behavior. The rule requires apps to get explicit consent from consumers to access the device’s Identifier for Advertisers (IDFA ) and transmit data to third parties. AppsFlyer, the leading global attribution provider, partnered with the partnered with MMA Global to survey consumers about the implications of these privacy related updates and larger issues surrounding privacy and their smartphone data. This study is a follow up to Apple, IDFA and iOS14: New Challenges, New Opportunities for Marketers, a survey of marketers conducted in September of 2020, about how they were preparing for the loss of data due to Apple’s impending privacy changes. Methodology: A quantitative study was conducted using a US consumer panel and a total of N=1500 surveys were completed. Qualifying consumers aged 13+ who own smartphones participated (1000 iPhone users and need 500 Android users) with a balance of male/female and various age groups achieved. The survey was fielded from February 5th - February 17th 2021. Key Findings: 1. There is heightened concern among smartphone owners for whom there is no one-size-fits-all approach when it comes to navigating the use of their data by app developers and content providers. 2. Smartphone users are divided over their thoughts on data and privacy with a marked difference in levels of concern expressed by younger vs. older groups. Youngest are least concerned. 3. A significant number of smartphone users have taken technological action to protect their privacy with ad blockers (used by 47%) and browser extensions (35%) the most common tactics. 4. Why is data collected? Most smartphone users understand that content is not free and that advertising and data sales pay for it. But, there is a marked difference in willingness to pay and for what types of content smartphone users will pay for. Teens are the most willing to pay for music while millennials are most likely to pay for video. Video overall is the most likely content type people will pay for. 5. Less than 1/3 of smartphone owners are aware of Apple’s privacy changes and when presented with the scenario of how it will work, they find it alarming and on average nearly half (47%) are very unlikely to opt in to tracking. 6. Smartphone owners are divided in terms of how confident they feel to make a decision about tracking and think that big tech needs to step in and provide more education. 7. Most smartphone users understand the negative consequences of not allowing tracking (ads becoming more repetitive & less relevant) but many (45%) still prefer to not allow tracking. 8. While 1/3 of smartphone owners will not allow tracking under any circumstances, the majority will allow some form of tracking rather than pay a subscription fee. Results: Smartphone Users Are Very Concerned About Data & Privacy The majority of smartphone users say they are very to extremely concerned about “the uses of your personal online data by companies.” The level of concern increases with age, and 38% of those 65 and older say they are “extremely concerned”, which is a 10 point increase over the norm. All age levels express some concern with 41% of those 18 - 24 saying they are “moderately concerned”. Overall, how do you feel about the use of your personal online data by companies? Age groups Age groups 13-17 y.o. 25% 18-24 y.o. 41% 45-64 y.o. 39% 65+ y.o. 38% Source: AppsFlyer & MMA, Personal Data, Privacy & Smartphones: The Cautious Consumer, March 2021 In the case of privacy, attitudes do translate into action for smartphone users. 47% of them on average are using an ad blocker and 35% use a browser extension to eliminate ads. These numbers rise with youth: 54% of 25 - 34s are using ad blockers and 49% of teen respondents are using browser extensions. What are their concerns about use of this data? The concerns are broad ranging with identity theft ranking highest, cited by 58%. There is also concern about fairness, with 45% saying that they should be receiving some share of the revenue earned from their data. What constitutes “personal online data”? Addresses, phone numbers and income rank highest for sensitivity, but some of the most commonly used social media data, such as personal interests, are still considered sensitive by 34% of respondents. Interestingly, real time data regarding location is not the highest ranking on the list. Which of the following types of personal information do you consider sensitive/the most sensitive, when collected and stored by a company online? Source: AppsFlyer & MMA, Personal Data, Privacy & Smartphones: The Cautious Consumer, March 2021 Smartphone users seem to have struck a bargain with their apps in terms of data. When asked which ones they think collect sensitive data, the majority cited email, social media and search engines, but at the same time they acknowledge that these are the apps they use the most. Which apps would you say that you spend the most time on your phone in general? Source: AppsFlyer & MMA, Personal Data, Privacy & Smartphones: The Cautious Consumer, March 2021 Online Content and the Value Exchange: Why Do Smartphone Users Think Businesses Collect This Data? DO smartphOne users understand that the cOntent ecOsystem Of apps relies On revenue frOm data fOr their business mOdels? Yes and nO. When asked hOw they thOught these cOmpanies generated revenue tO stay in business, just Over 1/3 (36%) said advertising, while 33% said by selling cOnsumer data and 28% said subscriptiOns. Fifty-three percent acknOwledged that it was all Of the abOve. In terms Of what they were willing tO pay fOr, the Netflix effect is acknOwledged by just under half (48% pay fOr streaming videO), 37% said they are paying fOr music, 25% utilities include health and 25% videO games. Sixteen percent say they are paying fOr news. The willingness tO pay is age specific. There is a 13 pOint bump fOr 35-54s tO pay fOr streaming videO Over the average, and a 16 pOint bump fOr this cOhOrt tO pay fOr streaming music. TO answer the “why” Of data usage, smartphOne users were asked hOw much they agreed with key statements abOut cOmpanies and their persOnal data. Thirty-nine percent strOngly agreed that the sale Of their data was tO make mOney, while just 14% strOngly agreed that it was tO imprOve their user experience Or deliver mOre relevant cOntent tO them. This discOnnect is especially impOrtant as many ad tech cOmpanies base their existence On the idea that cOnsumers prefer relevancy Over randOmly placed cOntent and ads. SmartphOne Owners are mOre likely tO believe that cOmpanies cOllect their data tO mOnetize it vs. just imprOve their experience and they feel that there is a "fairness" issue because they are nOt getting part Of the value Of that data. To make money by selling my data to To improve my experience by serving me content other companies or from advertising and services that are more tailored to my needs SOurce: AppsFlyer & MMA, PersOnal Data, Privacy & SmartphOnes: The CautiOus COnsumer, March 2021 Smartphone Users Show Limited Understanding of the Implications of the New Privacy Protocols Across the board, only about 1/3 of smartphone users fully understand the implications of the loss of data like the IDFA. Thirty-nine percent understood that ads and content might be less relevant, 34% said ads might be more repetitive (without tracking, what is called “frequency capping” of ads will not happen), and an equal number understood that apps or other content providers might need to charge a subscription fee or go out of business. If presented with free vs paid scenarios, overall 24% would allow tracking in exchange for free content, 45% still just don’t want to be tracked, and the number spikes for those 55 and up (34%) . When presented with a direct value exchange, there seems to be a limit to what people will pay for (subscriptions) vs. allowing data to be used. If they had to choose between “allowing tracking or paying a subscription fee to access a site/app”, equal numbers would only allow tracking for favorite apps, would pay a subscription fee or would make strong choices between what is paid for and what they allow tracking for. Clearly when it comes to privacy, there is no “one size fits all.” If you had to choose between “allowing tracking” or paying a subscription fee to access an app, which of the following would you do? I would allow tracking to all the apps that I use, to avoid paying subscription I would not allow tracking to any apps, but I would prefer to pay a subscription for certain apps only I would do something in the middle e.g. allow some apps to track me and pay for some others Other (specify) Source: AppsFlyer & MMA, Personal Data, Privacy & Smartphones: The Cautious Consumer, March 2021 Apple and Privacy Changes: Awareness is Low, Except Among Youngest Groups With the introDuction of an opt in protocol for users of iOS 14 imminent, survey responDents were askeD about whether they knew about the change. On average, just 30% of smartphone users were aware (34% of iPhone users, while 27% of AnDroiD users were aware). Significantly, nearly half of those 18 - 24 were aware (48%). What will smartphone users Do when suDDenly a pop up appears when they open up an app anD they are askeD to give explicit consent? the survey showeD responDents a mock-up of what the experience (anD language) will be like: ResponDents were askeD how the language maDe them feel.